Study: Working During College Leads to Higher Earnings Later

PISCATAWAY, N.J. (May 22, 2019) – In a study of more than 160,000 students at a public university, those who held a part-time or full-time job while going to school averaged post-college earnings up to $20,000 higher than classmates who did not work in college. The study by researchers at Rutgers University and the City University of New York (CUNY) suggests working students acquire skills and social networks that set them apart from peers with only academic credentials and unpaid internships on their resume. The Education and Employment Research Center at the Rutgers School of Management and Labor Relations published the study.

“A majority of today’s undergraduates are working, and we wanted to know how that impacts their earnings after college,” said co-author Daniel Douglas, a senior researcher at Rutgers University and visiting assistant professor of educational studies at Trinity College. “What we found was a remarkably consistent result. Working students appear to benefit from the experience, even if they do not complete a degree. We tried numerous ways of measuring work during college and post-college earnings, and we tried different statistical methods of addressing ‘selection bias.’ But in every case, the general pattern was the same.”

Researchers analyzed transcripts and earnings data for students who enrolled in a large, multi-campus public university between fall 1999 and fall 2008. Accounting for age, gender, race, college major, grade point average, work history, and other variables, they found that students who worked for pay during college averaged higher earnings immediately after leaving school and up to 15 years later. 

For example, working students pursuing an associate’s degree and earning between $5,000 and $15,000 in their first year of college saw an average, post-college earnings bump of $4,532. In other words, when they left the university—with or without a degree—they made an average of $4,532 more than their classmates who did not work in college. The students who earned the most while going to school received the biggest returns later:
 

How Much Working Students Earned During Their 
First Year of College

Average Earnings Bump After College

Students Pursuing an
Associate’s Degree

Students Pursuing a
Bachelor’s Degree

$1 - $5,000

$1,035

$1,639

$5,000 - $15,000

$4,532

$4,332

$15,000 - $25,000

$9,593

$10,179

$25,000 +

$18,155

$20,625

 

The post-college premium held for women and men; racial and ethnic minorities; students in the university’s community colleges and four-year schools; and students without prior work experience. While ambition, grit, and perseverance may explain the higher earnings for some students, the researchers believe personality traits do not tell the whole story. They suggest working during college carries three benefits:

  • Skill Acquisition: Work experience produces cognitive and soft skills valued by employers.
     
  • Signaling: A resume listing extensive work experience signals a job applicant’s promise.
     
  • Social Networks: Students acquire references and social networks for gaining post-college jobs. This is especially important to students from low-income backgrounds who may not have family connections.

Consistent with earlier research, the study finds that employment during college is sometimes a barrier to graduation. Working students were several percentage points less likely to receive a degree than non-working students. However, the study paints a more complete picture of student work by examining its impact on future earnings using previously unavailable administrative data. 

“Until now, studies of work during college have been narrowly focused on the consequences for graduation and colleges grades, and those studies led us to caution against significant term-time work,” said co-author Paul Attewell, a distinguished professor of sociology and urban education at The Graduate Center, CUNY. “These new longitudinal data analyses show a more complete, and more positive, picture of the effects of work during college.”

The researchers noted that a college degree still holds significant value. The study found that a degree by itself led to a post-college premium of $2,342 for an associate’s and $2,414 for a bachelor’s. However, the combination of a degree and work experience proved to be the best predictor of future earnings and labor market success. (And since all students in the dataset were enrolled in college, it is not possible to predict what their earnings would have been had they gone directly into the workforce after high school.)

Approximately 62 percent of college undergraduates work for pay while going to school, according to research by the National Center for Education Statistics (NCES). That figure does not include campus-related jobs such as work study or work during summer break. More than half of the students surveyed by NCES, 54 percent, said they could not afford to attend college if they did not work.

Douglas and Attewell are currently replicating their analysis in two other states.
 

Press Contact / Interview Requests
Steve Flamisch
Rutgers School of Management and Labor Relations
848.252.9011 (cell) 
steve.flamisch@smlr.rutgers.edu
 

About the Rutgers School of Management and Labor Relations
The Rutgers School of Management and Labor Relations (SMLR) is the world’s leading source of expertise on managing and representing workers, designing effective organizations, and building strong employment relationships. 

 

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